Due to the coronavirus pandemic, the entertainment industry has received a huge hit, especially movie theaters. With public places slowly re-opening with new protocols in place, AMC, one of the largest movie theater chains, talks about the company's future, warning investors about its uncertainties with financial fallout.
AMC closed its doors earlier this year and the theater chain expects to have lost around $2.1 billion and $2.4 billion in the first quarter. Its revenue fell to $941.5 million, down around 22% from the same quarter last year.
"We are generating effectively no revenue," the company states in a regulatory filing. "Even if governmental operating restrictions are lifted in certain jurisdictions, distributors may delay the release of new films until such time that operating restrictions are eased more broadly domestically and internationally, which may further limit our operations."
AMC says they have the "cash resources" to reopen and resume operations this summer or later. Afterward, its liquidity will depend "on the timing of a full resumption of operations," and movie releases, as well as its ability to "generate revenues," amongst other things.
If AMC isn't able to begin operations around July, "substantial doubt exists" on their ability to continue for a period of time. The company isn't able to make any predictions as well, considering that they have never experienced a "complete cessation" of operations before.
Add the fact that there's another competition in the business, with audiences being able to watch new movies at home. This was the case with Trolls World Tour, bypassing theaters for a digital release, which was deemed successful.
Hopefully, AMC, as well as other theater chains, will be able to bounce back after this once the situation gets better.
Also Read: AMC Theaters Will No Longer Show Any Universal Movies on Their Theaters